Some extremely risk averse non-investors simply put their money in the bank, earning meagre interest rates, would have lost money even if they did not try other ‘riskier’ instruments. Even the Citibank stepup account that promised up to 2% for deposits if you keep increasing the amount in the bank each month had changed their projects by reducing the percentage by a great deal. So far, only Fairpriceplus.com promised a 1% flat rate as they do not have a retail outlet as the operations are mainly online.

For such risk averse non-investors, they would be better off putting their money into money market funds. Money Market funds simply have economies of scales and they get higher interest rates that only apply to big amounts that the normal savers do not have.

For those who believe in fixed deposits, the amount is still not good enough. Some may try foreign currency deposits, since NZ currency interest rate is quite high, just like the Australian dollar.

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When I was in Perth, the exchange rate for 1 AUD is 1.50 SGD at the hotel! This is even more expensive than the current USD-SGD exchange rate. To think 12 years ago when I went to Perth, the Singapore dollar was stronger.

Before you travel, take note of the facilities available overseas. For example, it is quite tough to use credit cards in Japan, as they usually only accept cash or local credit cards. In developing countries, many of the shops do not offer credit facilities as well.

Hence, do take note and change enough money before travelling.

For me, it’s easy to use credit cards in Australia, and anyway, I used cash because I did not want to waste time on changing currencies again. 

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The foreign exchange market is also known as the FX market, and the forex market. Trading of currencies takes place in the market. You can choose to buy UK pound, US dollar, Yen or Swiss Franc. These are the major markets. Trading that takes place between two counties with different currencies is the basis for the fx market and the background of the trading in this market. The forex market is over thirty years old, established in the early 1970′s. The forex market is one that is not based on any one business or investing in any one business, but the trading and selling of currencies.

The difference between the stock market and the forex market is the vast trading that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. The amount is much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial institutions and those similar types of institutions from other countries.

What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country.

The difference between the stock market and the forex market is that the forex market is global, worldwide. The stock market is something that takes place only within a country. The stock market is based on businesses and products that are within a country, and the forex market takes that a step further to include any country.

The stock market has set business hours. Generally, this is going to follow the business day, and will be closed on banking holidays and weekends. The forex market is one that is open generally twenty four hours a day because the vast number of countries that are involved in forex trading, buying and selling are located in so many different times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market trading occurs.

The stock market in any country is going to be based on only that countries currency, say for example the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you are involved with many types of countries, and many currencies. You will find references to a variety of currencies, and this is a big difference between the stock market and the forex market. There are some people who only spend 5 – 10 minutes a day to execute their forex trades. All they do is to focus on one pair of currencies.

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The NZ government does not want to hurt the exporters, but with the increase in dairy prices, they are still doing well.

According to Bloomberg, the NZ finance minister has said that the NZ dollar has reached its peak and will continue to decline. This does not look very good because the high percentage in interest rates may not offset the fall in the value of the NZ dollar, when it is sold against the Singapore Dollar. Thus, you may want to reconsider buying NZ dollar now if you had not earlier done so.

Currently, the key rate for NZ dollar is 8.25%, which is at a record high. Based on this, it is a little puzzling that the interest rate at the bank is not as attractive.

Given the uncertainty of the NZ dollar, the breakeven rate is S$1.13. Currently, DBS offers it at $1.15, which is lower than it was at its peak. Hence, if the NZ dollar falls beyond that, it might be wiser to keep the fixed deposit in NZ dollars until it increases again, unless it falls beyond what you have bought the dollar at.

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You can sign up at the website and admission is free. It is organised by http://www.shareinvestor.com/. Its website offers quite a lot of informative research on various tools and companies.

Anybody planning to go?

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Well, unit fund investors have mentioned this long ago, but since I made so much money from India Fund, I went back to buy the fund again after selling it earlier this year, because the fund kept increasing.

However, over this few days, I’m bombarded with news from various sources about how expensive the Indian market was, so I’ve decided to sell my fund. I will only make 4% on it, but since it’s not losing money, and I’ve made some loose change, it’s good enough, since I cannot be sure when the Indian stock market will cash.

Sarah Tan – http://SingaporeProfit.com

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This is a little interesting, since the Singapore dollar has appreciated against the American dollar for some time, and the American dollar seems set to continue falling further.

The New Zealand dollar is 73% overvalued against the American dollar. The NZ dollar has increased significantly against the Singapore dollar, so it is quite expensive to buy the NZ dollar. However, as what I have mentioned earlier in another post, it currently offers high-yielding investments in rich countries. Carry traders (using a currency at low interest to buy high-yield currencies.

- Currency which are undervalued against the American dollar
- Argentina
- Australia
- Chilie
- China
- Czech Republic
- Egypt
- Indoneisa
- Japan
- Malaysia
- Mexico
- Peru
- Philippines
- Poland
- Russia
- Singapore
- South Africa
- Thailand

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Do check out the rates for the two banks in Singapore. Other banks such as OCBC require a larger initial amount of money to get started, so for small time investors, this is a very good platform to consider.

Take a look at the interest rates by two local banks.

Taken from DBS.com

Rates as at 04 June 2007 05:26:25 PM

New Zealand Dollar	1 day	1 week	1 month	2 months	3 months	6 months	12 months
Below 50,000	N.A.	6.2600	7.0900	7.1500	7.2800	7.4000	7.6000
50,000 – 99,999	6.6350	6.6350	7.1500	7.2100	7.3500	7.4500	7.6500
100,000 – 249,999	6.8850	6.8850	7.2800	7.3400	7.4100	7.5300	7.7300
250,000 – 499,999	7.0100	7.0100	7.4000	7.4600	7.5400	7.6500	7.8500

Taken from UOB.com

http://www.dbs.com/webapp/calculator?type=fcfd

Use this calculator to find out how much interest you can make if you put the money in foreign currency, and how much you can make if you put in local fixed deposits.

Sarah Tan – SingaporeProfit.com

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